Frame · The Exit Preservation Score
A free 2-minute diagnostic for venture-backed founders. See your personalized Exit Preservation Score and understand what drives the gap between what you could keep and what most founders actually keep.
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The Exit Preservation Score is a transparent model, built by former private wealth advisors, grounded in IRS Section 1202, state tax codes, and current estate planning mechanics. In about two minutes, it scores your setup across four drivers:
Two side-by-side modeled paths for your exit, with specific drivers explaining the gap:
Results are educational and illustrative. Individual outcomes depend on facts and timing; nothing here is a promise of any specific tax result.
The diagnostic scores your setup across the four levers that decide what a founder actually keeps at exit.
| Lever | Default path | Coordinated plan |
|---|---|---|
| QSBS tracking | Eligibility checked at exit, after holding-period and asset-test mistakes are locked in. | §1202 qualification confirmed at issuance and tracked across each financing; post-OBBBA tiered hold and per-issuer cap modeled. |
| Residency planning | Resident in a high-tax state at sale; full state capital gains apply on top of federal and NIIT. | Residency decisions evaluated 18–36 months out, with domicile facts established well before a change-of-control trigger. |
| Coordinated advisory | Tax, legal, and wealth advisors brought in separately and late, often after key elections expire. | One model shared across CPA, attorney, and wealth manager so QSBS, residency, and trust moves don't undercut each other. |
| Estate & trust timing | Trust conversations start after the deal is announced, when most structures are blocked by change-of-control or anti-abuse rules. | Non-grantor trust structures and QSBS stacking evaluated years before exit so the 5-year clock and gifting windows are still usable. |
Educational comparison only. The diagnostic models a personalized version for your facts; nothing here is a promise of a specific tax outcome.
Four things compound: federal long-term capital gains, the 3.8% Net Investment Income Tax, state income tax (zero in TX/FL/WA/NV, up to 13.3% in CA), and structural leakage — unvested equity taxed as ordinary income, missed §1202 qualification, late trust setup, and uncoordinated advisor timing.
QSBS is stock in a domestic C corporation meeting IRC §1202 requirements that, when held long enough, lets a qualifying shareholder exclude a large portion of federal capital gains at sale. Tracking starts at issuance because the asset test, the original-issuance rule, and the holding-period clock are evaluated from day one — they cannot be reconstructed at exit.
The state you are a bona fide resident of when the gain is recognized generally controls state tax on that gain. High-tax states tax founder gains on top of federal and NIIT; some states (notably California) also do not conform to the federal QSBS exclusion. A valid residency change requires real domicile facts established well before the deal.
Most trust strategies — non-grantor trusts, QSBS stacking across multiple taxpayers, gifting at low valuations — require funding before a binding letter of intent and before the §1202 five-year clock matters. Once a deal is in motion, change-of-control provisions, anti-abuse rules, and a higher valuation block or dilute these structures.
Frame is a decision-intelligence platform for venture-backed founders navigating a likely exit in the next 6 to 36 months. The Exit Preservation Score is the free top-of-funnel diagnostic; Frame itself is the paid product that turns the score into a coordinated plan with QSBS, residency, and trust mechanics modeled together.
The Exit Preservation Score is a free 2-minute diagnostic from Frame that estimates how much of a founder's potential exit is at risk of being lost to tax and structural leakage. It scores a founder's setup across QSBS qualification, equity structure, residency, and trust planning, and shows the gap between what they could keep and what most founders in similar situations actually keep.
QSBS (Qualified Small Business Stock) is stock in a domestic C corporation that meets IRC §1202 requirements. A qualifying shareholder who acquired the stock at original issuance and held it long enough can exclude a large portion of their federal capital gains tax at sale, up to a per-issuer cap.
The One Big Beautiful Bill Act, signed July 4, 2025, modernized §1202 for stock issued after that date. The per-issuer cap rose to the greater of $15 million or 10x adjusted basis, the holding period became tiered at 50% / 75% / 100% for 3 / 4 / 5 years, and the aggregate gross-asset threshold rose to $75 million. Stock issued on or before July 4, 2025 keeps the legacy rules.
It varies widely with structure, residency, and QSBS status. As a general reference, founders in high-tax states with no QSBS planning often net roughly half of their gross proceeds after federal capital gains, NIIT, and state tax, while founders with full QSBS eligibility and favorable residency can keep a materially larger share. Individual outcomes depend on facts.
At incorporation — and meaningfully again 18 to 36 months before a likely liquidity event. The highest-leverage decisions (C-corp election, QSBS qualification, trust structures, residency) compound over years, while last-minute moves are usually blocked by the five-year QSBS clock and change-of-control provisions.
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Prefer to read first? The 2026 founder capital gains tax guide · The QSBS guide · What founders actually keep at exit.